"Lives will be destroyed as a result of these changes" ... general secretary of Unions NSW, Mark Lennon. Photo: Janie Barrett

''Lives will be destroyed as a result of these changes,'' the general secretary of Unions NSW, Mark Lennon, said.

A new state government assessment system will make it more difficult for people with existing claims to continue receiving the same weekly payments. The system will cap continuing benefits for medical expenses, such as physiotherapy and counselling.

From Tuesday, workers who made claims before October will have their weekly payments calculated under a tougher system.

''The real-life circumstances of the job market and where injured workers and their families live will not be taken into account in deciding their entitlement to weekly payments,'' Mr Lennon said. ''This could see an injured Sydney-based accountant lose their weekly payments if they are unwilling to move to the Pilbara to work as a bookkeeper, for example. For those with industrial deafness … they will be on their own to cover the substantial costs [of replacing] hearing aids and batteries, once the medical cap runs out.''

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Mr Lennon said it would remove the incentive for employers to provide a safe workplace because, if anyone was injured on the job, ''after a certain period of time, that injury will no longer be reflected in their insurance premium''.

The cuts were in addition to far-reaching changes in June that the O'Farrell government said were needed because the scheme was $4 billion in deficit and premiums would otherwise have had to rise by 28 per cent.

Robbie*, 38, said his mental health had seriously suffered since he discovered he would no longer be entitled to a lump-sum payment. He was working as a nurse at Wollongong Hospital when he injured his back more than five years ago. He received treatment to the nerve endings on his back, which allowed him to manage the pain and keep working. But his sixth treatment failed and he spent three months in bed. He then spent two years waiting for his surgery to be approved and had to sell his home to pay the bills.

''I had to wait nine months after the surgery to get a doctor's report for my claim,'' Robbie said. ''I was told I would get a lump-sum payment of about $250,000. But two weeks before that could happen, the government changed the workers' compensation scheme and I was told I would get nothing because my level of impairment won't be recognised under the new system. I feel like the insurance company is now being rewarded by ripping up all my rights retrospectively.''

The Greens MP David Shoebridge said thousands of injured workers would be stripped of entitlements and be forced onto Centrelink benefits.

''Cuts to workers' compensation benefits in June provide that no injured worker is entitled to receive weekly income benefits for more than 2½ years unless they are totally incapacitated for any kind of work or have managed to get back to work for 15 or more hours a week,'' Mr Shoebridge said. ''There are estimated to be about 38,500 injured workers in receipt of weekly benefits who will be subject to this new time limit.''

This excludes a small number who are defined under the new scheme as ''seriously injured'', that is, having received a ''whole person impairment'' assessment of 20 per cent or more.

''Many of these workers will have received court orders that they thought had given them protection until they were aged 66 years, but are instead facing the loss of their entitlements almost overnight,'' Mr Shoebridge said.

A spokeswoman for the Finance and Services Minister, Greg Pearce, said all injured workers would be provided with three months' notice to any changes to their weekly benefits after a work capacity assessment.

''After 130 weeks, if they have the capacity to work but are not working at least 15 hours a week and earning at least $155 per week, their benefits will cease,'' she said. Workers who had suffered a significant injury would still be eligible to receive a lump-sum compensation payment. Weekly payments for seriously injured workers have risen from $432.50 to $736.